To counteract the labour shortages brought on by an ageing population and a low birth rate, Canada needs to expand immigration. Learn about the state of the Canadian labour market and why immigration may be the solution.
The percentage of "people who were, or had ever been, a landed immigrant or permanent resident in Canada" (collectively referred to as "immigrants") as of 2021 is 23%, the highest percentage since Confederation in 1867.
The number of immigrants in the country was at its maximum in 1921, when immigrants made up about a quarter of the population.
If current demographic trends continue, immigrants "may comprise [anything] from 29.1% to 34.0% of Canada's population by 2041," according to Statistics Canada's population forecasts.
Canada's annual Immigration Levels Plan for 2023–2025, which was published on November 1, 2022, adds support to these forecasts. As of now, Canada's immigration goals call for it to take in 465,000 newcomers in 2023, 485,000 in 2024, and a record 500,000 new Canadian permanent residents in 2025.
You might be wondering why Canada is allowing so many new immigrants after seeing all these large figures.
Let's dig a little deeper into this topic by first analysing the demographic changes that are now occurring in Canada.
Two critical elements — the ageing of Canada's native population and the low reproduction rate of the nation — must be recognised in order to comprehend why immigration is becoming so prevalent across the country. Canada's labour market is contracting as a result of these demographic changes, which has a variety of negative effects on the economy of the nation.
People in Canada are ageing swiftly.
The 2021 census shows that between 2016 and 2021, the number of children under the age of 15 increased at a rate that was six times slower than that of individuals 65 and over. Moreover, there are now 7 million people in Canada who are 65 years of age or older, a growth of 18.3% from 2016 to 2021. Canadians who fall within this age bracket today make up 19% of the country's population. This statistic, together with the fact that the largest-ever five-year growth in the number of seniors in Canada (+20%) occurred in the census reporting period right before the most recent census (2011 to 2016), indicates that the country's population is ageing quickly.
Fewer children are being born in Canada.
The fact that Canada's birth rate is below the population replacement level adds to the worry regarding negative trends in natural population increase. At 2.1 children per woman, the population replacement level is current. Canada's fertility rate has progressively decreased over time, continuing a trend that began in 2009, and will hit a record low of 1.4 children per woman in 2020. The number of newborns in Canada fell to its lowest level since 2007 in 2020, and the year-over-year decline in births (-3.6%) was the largest since 1997.
Solution: For Canada to prosper, immigration is necessary.
Canada's continuing economic growth and development depend on immigration.
Every country needs a robust labour force to enable consistent production of goods and provision of services because its citizens are what fuel national expenditure and consumption. A country's economic well-being will be negatively impacted by a weak population and a labour force shortage, which will limit production and consequent spending.
Luckily, increased immigration will help Canada better avoid these issues.
Canada's population growth is mostly dependent on immigration because of the difficulties mentioned above. In fact, during the most recent census reporting period (+1.8 million between 2016 and 2021), "nearly 80% of the country's population growth was attributable to new arrivals to Canada either as permanent or temporary immigrants," which explains why Canada's population "grew… almost twice as fast as other G7 countries."
Given that immigrants in Canada made up 79.9% of the increase in the country's workforce between 2016 and 2021, this immigration-driven population growth has been extremely advantageous for the country's labour force. In addition, increased immigration will enable Canada to overcome what the Financial Post claims is a "historic" labour deficit.
According to a survey by RBC economists Nathan Janzen and Claire Fan, "almost half of [all] Canadian enterprises are limited from boosting production, compared to 40% before the epidemic and 30% a decade ago," according to the Financial Post. Fortunately, "an infusion of immigration," along with a concentrated effort towards "putting newcomers' skills to work and integrating this expertise into the Canadian workforce," can provide the workforce productivity a much-needed boost.
Immigration will ultimately assist speed up economic growth across the nation due to the benefit it will give to the growth of the labour force in Canada. The economy of Canada will keep growing favourably as more new immigrants find work, make money, and then spend it, stimulating the economy. Additionally,